Caleb Silver, Editor In Chief, High discussed on ABC News Perspective
Up front. I don't know anything about the stock market. So when I heard people on TV, saying things like this to the accepted, you're selling 40 more shares of that company that don't exist and all of a sudden other folks who like Hey, wait a minute. This is going to get squeezed and they buy it. I knew it was time to call up. Caleb Silver editor in chief of Invested PD. A. This is a watershed moment in investing in trading. And it's fascinating to watch because so many people are learning about it For the first time, Caleb explain that this all began a few days ago when shares of Gamestop of video Name retailer that mostly operates in malls suddenly started shooting up in value. And, he says, if you've been paying attention to game stops business lately, that's pretty weird. You've been watching the economy over the last year, we haven't been going into shopping malls and buying video games in shopping malls. In fact, the business of buying video games in retail stores his basically over in 2018, it reported an annual net loss of $485 million. So the company's been on the rocks for a while, and Wall Street has been taking notice. Specifically hedge funds, Wall Street or financial institutions that have been betting against the price of the stock thinking that the company's prospects aren't that good. This is what's known as shorting the stock. Basically, these hedge funds borrow a bunch of shares in a company when the value of those shares is high, and then they sell those shares at that high price banking on the idea that they'll eventually lose value. This is what happened to Gamestop. Wall Street Investors expected the value of the company stock to continue on its downward trajectory, so they saw High with the expectation that they could buy low in the future and pocket the difference. But before that could happen. Read it got involved.